NewsSapphire Foods India Limited Reports Significant Reduction in Income Tax Demand Following ITAT OrderSapphire Foods India Limited Reports Significant Reduction in Income Tax Demand Following ITAT Order
Sapphire Foods India Limited disclosed a major reduction in income tax demand from INR 170.41 million to INR 2.51 million following an ITAT order dated 7th November 2025. The tribunal ruled the company cannot be treated as an assessee in default where underlying tax was deducted and deposited. The Income Tax Department has filed an appeal with the Bombay High Court challenging the ITAT order for assessment years 2016-17 and 2018-19 to 2023-24.
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Sapphire Foods India Limited has announced a significant reduction in its income tax demand following an order by the Income Tax Appellate Tribunal (ITAT), Mumbai. The disclosure was made to the stock exchanges on 24th April 2026 under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The development follows the company's earlier intimation dated 26th June 2025 regarding the receipt of an order under Section 250 from the Office of the Commissioner of Income Tax, Appeal Addl/JCIT(A), Ranchi. The company had filed an appeal at the ITAT, Mumbai, which pronounced its order on 7th November 2025. The Order Giving Effect was subsequently passed by the Assistant Commissioner of Income Tax, OSD TDS Circle 2(2), Mumbai on 30th December 2025.
ITAT Ruling and Tax Demand Reduction
The ITAT, in its order dated 7th November 2025, held that the company cannot be treated as an "assessee in default" under Section 201(1) of the Income-tax Act, 1961, where the underlying tax has been subsequently deducted and deposited. The tribunal further ruled that interest under Section 201(1A) of the Income-tax Act, 1961 shall be restricted up to the date of actual payment of such taxes.
Pursuant to this order, the Assistant Commissioner of Income-Tax (TDS) passed an order giving effect to the ITAT ruling and raised a demand towards interest under Section 201(1A) amounting to INR 2.51 million, significantly lower than the original demand of INR 170.41 million.
| Particulars | Amount |
|---|---|
| Original Demand | INR 170.41 million |
| Revised Demand | INR 2.51 million |
Appeal by Income Tax Department
The Income Tax Department (TDS) has filed an appeal under Section 260A of the Income Tax Act, 1961, with the Hon'ble Bombay High Court challenging the order passed by ITAT. The appeal pertains to assessment years 2016-17 and 2018-19 to 2023-24. The company stated that no settlement has been reached in the proceedings, and the matter remains sub-judice.
Historical Stock Returns for Sapphire Foods
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.36% | -3.02% | +8.31% | -42.30% | -50.61% | -30.95% |
How might the Bombay High Court's decision on the Income Tax Department's appeal impact Sapphire Foods' financial position and future tax compliance strategies?
Could this favorable ITAT precedent regarding 'assessee in default' status benefit other companies facing similar TDS-related tax disputes?
What impact will the ₹167.90 million tax relief have on Sapphire Foods' expansion plans and capital allocation for FY2026-27?
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